Rocks And Stocks Special Report On Market Trends For Precious and Base Metals And Stocks Focused On Those Metals
I'm seeing some fantastic bullish signals for precious and base metals and presented a great group of companies poised to take advantage of these trends.
The trends for US dollar (USD) and gold, silver and other metals are fully in tact. On days when the market feels the Federal Reserve will stay hawkish USD is up and the precious and base metals are off. The opposite happens on days when the market feels the Federal Reserve is nearing the end of the road for raising rates.
The day to day fluctuations don’t change the reality that the Federal Reserve is concerned about overtightening. They have already telegraphed that they are near the end as they feel peak interest rates will be around 5% to 5.5%. They are already breaking things, real estate sales are in free fall, the yield curves are inverted.
They maybe have another 0.75% left to go. Maybe they do half a percent at the next meeting and then a quarter, or three quarter point moves at the next three meeting. The bottom line is they are blinking and signalling they are coming to the end of the rate increase cycle. They are saying they won’t lower in 2023, but I think that will be wrong just like they were wrong when they said inflation is transitory.
When markets get focused on the day to day, they lose focus on reality of the big picture. The real estate market and economy was built on near zero interest rates from the economic collapse in 2008, until 2022. Now that they have so aggresively raised rates from near zero, without taking credit for their actions causing the inflation, they are most definitely breaking things, real estate is broken and the inverted yield curves are suggesting the entire economy is breaking as well.
After they end raising rates, it won’t be many months before they start a new round of quantitative easing. They always overshoot because they wait for data to confirm their actions, and economic models to justify their actions, that have been proven wrong time and time again. This time, just like the inflation is transitory models, is no different. They are breaking things and ignoring they are breaking things.
Meanwhile, the trends are clear, the USD is at a Death Cross, at the same time gold is heading toward a Golden Cross and silver has already gone through a Golden Cross.
The currency and precious metals can clearly see that the Federal Reserve is getting to the end of its rate increases. The rate increases helped the bull market in the USD for much of 2022, but that party ended in September. The most watched price for gold and silver is in US dollars. Precious metals got more confidence in the change coming for Federal Reserve policy in November, 2022.
With the USD going through a Death Cross, silver already gone through a Golden Cross and gold likely to go through a Golden Cross this month, the trends are suggesting it is better to be in precious metals than the USD. This recent action is a strong signal that 2023 will be an excellent year for gold and silver.
In the next few days I will put out 2023 Outlook report and discuss where I see these trends going in 2023. It is safe to say I’m bearish on the USD and extremely bullish on gold, silver and other metals.
The best way to play this trend is in the undervalued metals stocks. Take for example i-80 Gold (IAU.T and IAUX.NYSE).
As you can see, like gold and silver, it had a significant breakout in early November, 2022, then had a Golden Cross in December, 2022 and now is trading well above its 50 day moving average (50 DMA) and its 200 day moving average (200 DMA).
What fueled this peer leading move was the announcement of a spectacular hole from their carbonate replacement deposit (CRD) at the Ruby Hill project near Eureka, Nevada. If you look at the metals value in situ all have been over USD $1000.00 and some have surpassed USD $5000.00. Truly remarkable results that ranks it as some of the highest in situ rock values in Nevada and throughout the world.
They are truly a remarkable company, in that they are exploring and developing a world class project at Granite Creek for a big, high-grade gold system in close proximity to a 25 million ounce gold mine. Plus a world class gold system at Ruby Hill with their Ruby Deeps and 426 zone. Also at Ruby Hill they have a world class CRD with high-grade silver-lead-zinc that has a bonanza grade gold overprint. Without a doubt they are on a phenominal path to success.
Right beside them is Paycore Minerals (CORE.V) that approximately 2000 metres from i-80 Gold’s CRD, have also found a high-grade silver-lead-zinc CRD with a bonanza grade gold overprint.
They have only been a public company since April, 2022, but have hit the ground running with the drilling of their CRD. They are following a similar trend as i-80 Gold, they also broke out in November, 2022 and are currently trading well above their 50 DMA. It is clear they also have a remarkable CRD on their hands.
Right beside Paycore Minerals is Golden Lake Exploration (GLM.CSE). Around 6000 metres from i-80 Gold’s CRD, they also have a high-grade silver-lead-zinc CRD with a bonanza grade gold overprint.
Now they aren’t nearly as advanced as i-80 Gold and Paycore Minerals are with their CRDs. Nonetheless, their stock chart is following a similar path having broken out in November, 2022. The stock is trading well above its 50 DMA and is above its 200 DMA.
It is headed toward a Golden Cross, I believe the main catalyst that will take it over a Golden Cross is when they start drilling on their CRD. Which I think will be in the near term. In the meantime, gold and silver getting stronger, and the power charts that i-80 Gold and Paycore Minerals have will also be important catalysts as they announce more drilling results.
Another company in the Eureka mining camp is Timberline Resources (TBR.V). They have done a lot of drilling to expand the known gold resource on their property which is right beside Golden Lake Exploration.
As they move to the east the resource is getting bigger, and the rock packages and geological structures are all pointing toward a huge geophysical anomaly. That anomaly is a likely suspect of the heat engine that pumped the gold into the resource.
The key rock packages and network of structures goes from i-80 Gold’s ground, through Paycore Minerals and Golden Lake Explorations ground and through Timberline Resources as well. So, Timberline also has the potential to find exceptional CRDs like their neighbours. In fact, it looks like they may have clipped the edge of one in their recent drilling.
Their chart is not nearly as powerful as their neighbours, but I think that is about to change. They have pending assays from their recent drilling that should be out soon. So they have plenty of catalysts ahead of them.
In the western part of Nevada, Walker River Resources (WRR.V) has recently completed drilling on two targets with assays pending that should be out soon.
They had a big breakout in early December, 2022 that has them trading well above their 50 DMA and 200 DMA, and on the cusp of a Golden Cross that only looks to be a week or two away.
What caused this action was they completed drilling at their Pikes Peak target and their Lapon Mountain drilling. The Pikes Peak target is a porphyry target which could be the heat engine for the widespread high-grade gold at the nearby Lapon Mountain.
At Lapon Mountain, historical mining and drilling by Walker River Resources has shown a widespread area of high-grade gold distribution. As well as a network of faulting and a large alteration zone. This all suggests a very poweful gold mineralizing system.
The next step at Lapon Mountain is to show that this big system has continuity of the high-grade. They have been challenged to do that while drilling from the side of a steep mountain. A major breakthrough was when they hit their Hotspot Zone at the top of the mountain.
Their recent drilling was at the top of the mountain where it flattens and allows them to drill short vertical holes from just above the Hotspot Zone. I’m eager to see the drilling from up there as it will allow them to tag the Hotspot Zone with vertical holes. Which I think will give them more geological information to start showing the high-grade continuity.
Ultimately, I believe this is a very big gold system with excellent high-grade continuity. If they show that, which I think they are at an important juncture to do just that, their valuation has the potential to go much higher.
I’m a big fan of silver, and Blackrock Silver (BRC.V) has an exceptional silver resource on their Tonopah, Nevada project. It has one of the highest grade silver resources in the business for undeveloped mines.
Their maiden resource is similar in size and grade as the maiden resource by Silvercrest at their Las Chispas mine. Silvercrest has been a huge winner for investors by first exploring Las Chispas and now bringing it into full commercial production. It is a cash making machine of a mine because it has low costs and high margins.
Other similarities are that Blackrock Silver’s resource and Silvercrest’s are hosted in a network of epithermal veins. Since putting out the maiden resource, Blackrock has continued to drill and expand to almost double the footprint of the maiden resource.
When I did an interview with Andrew Pollard recently, he pointed out that just like Silvercrest after they put out the maiden resource they plan to focus on where the veins are open and target the high-grade inside the resource. When Silvercrest did that they dramatically increased the ounces in the resource and the grade.
The key reason I did the interview with Andrew Pollard was to discuss the results of bonanza grades of gold and silver reported from their Silver Cloud project. It came from a single hole, on the west side of their project, near a big fault that is likely associated to the epithermal vein they hit.
This gives them a nice problem, how to allocate their drilling dollars between the Tonopah project and Silver Cloud. I’m sure the main focus will be at Tonopah, with some put into following up the bonanza grade hits at Silver Cloud.
I featured them a couple times in my 2022 Year In Review show. One spot was because they are one of my picks in the tax loss silly season list. As you can see they are trading right at their 50 DMA. I also included them in the deep value play section because I believe based on their silver resource they are undervalued and getting no value for their ability to grow that resource from recent drilling.
They are a catalyst rich company with drill results pending from Tonopah, plus the next drilling at Silver Cloud to follow up on the bonanza grade hits, and they also have an impressive lithium play. With all these catalysts, I don’t think it will be long before their 50 DMA moves up and passes the 200 DMA for a Golden Cross.
Another kind of gold system that I follow very closely are orogenic gold systems. One of the most recent ones that caught investor imagination was the Swan Zone at the Fosterville Mine in Australia.
When Kirkland Lake started mining that, they became one of the lowest cost producers of gold in the mining sector with extreme margins because the grades in this style of gold system are so high. Low mining costs and high-grades makes for a cash machine of a mine churning out lots of free cash flow.
The success Kirkland Lake had mining the Swan Zone drove their stock price through the roof making them one of the top performing gold mining stocks. Then they were bought out making their long term shareholders massive winners.
The next two companies are at important junctures in the exploration of their orogenic gold systems. They are on the cusps of explosive growth potential.
Sokoman Minerals (SIC.V) has been exploring their orogenic gold system for a few years, relatively close to surface. These orogenic gold systems are fault controlled and can go very deep, from near surface to well beyond 1000 or 2000 metres.
In the near surface drilling they had found a large area of widespread high-grade to bonanza grade hits of gold. It was usually over relatively narrow widths. One of the key zones they hit it at was at their eastern trend zone. Then in September, 2022, they announced a truly remarkable hit of bonanza grades over a thick intersection for this style of deposit. I called it a jewellery box hit, they called it the 463 Zone.
After that hit, they put cameras down the hole, which enables their geologists to see the rocks down the hole. They have a renowned structural geologist review the images and he came up with the model below.
The red zone is their Eastern Trend, and the magenta zone is their new 463 Zone which hit the bonanza grades of gold over a thick intersection. This model is very important because it is a lookalike to the Swan Zone at the Fosterville mine. At the Swan Zone they found this exact situation with two zones coming up at different directions where they cross paths.
After developing this model, they drilled another hole to test this model and confirmed it makes sense when they announced they hit that 463 Zone with hole 505. Now they are gearing up for another hole to test the 462 Zone model this month as they await assay results from hole 505. They aren’t waiting for the results of hole 505 to start drilling additional holes into 463 Zone. They saw what they needed in the core and are forging ahead.
This jewellery box hit at the 463 Zone looks like they have tagged the top of a Swan Zone lookalike. They are at an impressive juncture and I think they are on the doorstep of massive success.
The stock is getting much stronger since they announced the hit at 463 Zone with a series of higher lows, it’s now trading above its 50 DMA and 200 DMA and is on the verge of a Golden Cross in January.
Galantas Gold (GAL.V) also has an impressive high-grade orogenic gold system, it is in Northern Ireland. I only ever made one pick of a stock in Northern Ireland, it was Dalradian Resources. I picked them very early in their exploration when they were trading at 25 cents, they had huge success and were bought out at multiples of that price.
I picked up on the Galantas Gold story early in their drilling success because they had announced very impressive results. I also thought they could be another Dalradian type pick for me.
Since I first started coverage of them, they have continued to have impressive drilling results. Most of their drilling has been focused on the Joshua and Kearney veins. At these two veins they have widespread high-grade gold hits, and have also found a series of dilation zones which are where the rocks open up and allows the gold bearing fluids to pool up.
I like the image above because it helps tell the story. As you can see Joshua and Kearney, and other zones are tightly packed into a small area. They are just to the north of a key structure the meanders through the centre of the image.
Those structures or cracks in the earth are very important in an orogenic gold system for a couple reasons. Firstly, they are a deep crack that works as a conduit for the gold bearing fluids to make their way up from very deep in the crust. Secondly, as they get closer to surface they cause secondary faulting which is also often where deposits like the Swan Zone are found.
So far, most of Galantas’ drilling has been relatively close to surface. The combination of finding high-grade gold with several holes and intersecting a network of dilation zones speaks volumes about the depth potential. It enables them to predict with high accuracy where to follow the zones deeper.
Ultimately, I believe they are all connected at depth into one feeder, that is related to the deep crack in the earth. Another important factor with orogenic gold systems is the deeper you go, and get closer to the heat engine that pumped the gold closer to surface is where you get increasingly higher grades.
The bottom line is that they have a special orogenic gold system that is wide open at depth. Their news flow from drilling deeper looks to be exceptional.
Their 50 DMA and 200 DMA are tight and moving in a somewhat bullish direction. They are at an inflection point that I can see is poised for a bullish breakout. They have a cheap valuation and plenty of catalysts to drive the stock much higher.
Last but certainly not least, I wanted to write about my favourite base metal explorer Nine Mile Metals (NINE.CSE). They have drilled into two VMS occurances in the Bathurst Mining Camp, in New Brunswick, Canada.
The Bathurst Mining Camp is one of the most important VMS mining camps in the world, it is truly elephant country.
In the final days of trading in 2021, their stock had a Golden Cross, then in late May, 2022, the stock blasted off when they started reporting on the success they were having at their Nine Mile Brook target. They hit a thick intersection of a massive sulphides lens with exceptional grades, including up to 10% copper, and with zinc, lead, gold and silver.
I started covering the company because I was impressed with the lens, it was thick, had high-grade mineralization and came right to surface. It is important to note that this is the farthest extension from the source heat engine of the VMS. The thickness, grade and that it comes close to surface indicates the remarkable potential for size and grade when they find the soure of where the lens came from.
While they were awaiting permits to get back to drilling at the Nine Mile Brook lens, they drilled a series of holes 20 km away at their California Lake target. There they were going off reprocessed geophysics from historical geophysical surveys. The company they used to reprocess the historical information is EarthEx. They use big data and algorithms to filter out the geophysical noise and pinpoint where to drill for massive sulphides.
It worked like a charm, they hit massive sulphides in their holes, with excellent grades of base and precious metals. VMS deposits have zonation of grade, with a zinc-lead-silver zone nearest to surface and a copper-gold zone deeper and closer to surface. The fact that they got sniffs of copper and some nice gold numbers at near the surface where they also had a zinc-lead-silver zone is an impressive indicator that they likely have a VMS with a zinc-lead-silver zone near the surface and a deeper copper-gold zone below it.
They have a very special situation. They have two massive sulphides occurances to drill for the sources at Nine Mile Brook and California Lake. As you can see in the Google Earth image below they are in close proximity to some of the most important mines in the Bathurst Mining Camp, including the crown jewell of the camp at the Bathurst #12 mine.
In late 2022, they got back to drilling at Nine Mile Brook looking for the source of the impressive VMS lens. When I firsted started covering the company, I did my homework and saw a key rock package to the immediate east of the lens where there is a hinge in the rocks. It sticks out like a sore thumb in the geophysics and as soon as I saw it I thought that is a likely suspect of where the source of the lens came from.
They have plenty of catalysts ahead, they have a sub CAD $20 million valuation and are finding VMS occurances in elephant country. I think they are going to have exceptional success at Nine Mile Brook and California Lake that has the realistic potential to drive their valuations to several multiples of its current valuation.
In Closing
All of the companies above are sponsors of my reports. This gives me the opportunity to do a series of interviews with management when they have breaking news. In addition, they are featured regularly on my reports on the sector. You can find their interviews and in the reports on the sector here on my Youtube channel. As well as in written reports on my Substack page.
I’m very proud that during a challenging market for juniors, my sponsors have been performing very well. I think they have an excellent combination of strong projects, they are working on their projects when many of their peers are pulling in their horns afraid to spend their money on exploration, and are eager to tell their stories when many of their peers are ducking for cover. This is a recipe to be leaders as we are entering a stronger market for gold, silver and other metals.
As always my reports are for research only, before making any investment decisions you should speak with your financial advisors and do your homework. A good place to start your homework on the companies I follow is on my Youtube Channel. Then check out the websites of the companies I report on where you should look at their news releases and corporate presentations.
I hope you are enjoying the holidays and I would also like to wish you a prosperous 2023.
All the best,
Allan Barry Laboucan
Founder
Rocks And Stocks News
Hi Allan
New subscriber to your sub stack.
Have you heard of Boab Metals ?
It would be interesting to have your expert thoughts on this one.
Boab Metals (BML.AX) have always had a policy of de risking the Sorby Hills project as much as possible and in their just released DFS (NPV8 $370 Million, market cap $50 Million)
Boab has very high confidence in the capital cost estimates with 75% of the costs underpinned by up-to-date tendered pricing for the Process Plant, Open Pit Mining, Early Works, Tailings, Water Storage and infrastructure which shows they know what they are doing when it comes to pleasing the potential financiers of the project.
The biggest risk is the metals prices and this story which is a primary lead with a particularly high silver grade for a lead project is progressing at a time when the silver price is looking particularly promising and lead has just been added to the Bloomberg Commodities Index and all base metals are in short supply on the LME with China just about to open up so interesting times.
Regards
Brent